Insights from Bert Muller, Founder of California Burrito
As a charter member of TiE Chennai, the entrepreneur association, I attended today a talk by Bert Muller, the young and dynamic founder of California Burrito, a Mexican food chain that has achieved significant success in India. His journey is a testament to the entrepreneurial spirit, especially for those venturing into new geographies and industries without prior experience. Here are some key takeaways from his inspiring story.
Bert, an American, came to India as a tourist and fell in love with the country. At just 22, with no experience in business, India, or the food industry, he and his two co-founders decided to start California Burrito in a Bengaluru Tech Park. In the initial days, he and his co-founders wore suits everywhere, only to realize it didn’t work in India. They bought a Maruti Omni Car to save money and documented their early steps in detail on a Tumblr blog.
The venture, inspired by Chipotle in the USA, began with three non-Indian founders. Despite the challenges, they opened their first store, which was a success, earning around ₹1.6 lakhs (inflation-adjusted) per month in its early days.
The journey was not without hurdles. Bert shared how they had to reboot after encountering some “bad apples” in hiring, who were funneling money with the help of multiple people, including government officials, under false pretenses. Bert and the co-founders identified the leakage after a few months, fired those involved, and managed to navigate these challenges. Those early failures, when the business was small, provided valuable lessons that helped them as the business grew. The importance of having a strong financial backbone was evident, as their highest-paid employee today is their CFO.
Expanding to a second city too early, driven by the desire to please venture capitalists, was a mistake. Mr. B.S. Nagesh, CEO of Shoppers Stop, advised them to focus on establishing a strong presence in Bengaluru before expanding: “Open 1000 stores in your first city, get things right, before you go to the next city.” This advice proved invaluable, as they found success in tech parks in Bengaluru, while other locations like Chennai and Delhi required different strategies. Today, California Burrito has expanded to 90 stores across India, showcasing its growth and success in the competitive food industry.
Initially hesitant about marketing, Bert learned the importance of aggressive marketing in the first three months of a new store opening from Mr. Ajay Kaul, Former CEO of Jubilant Foodworks Ltd (Domino’s Pizza India), who became their mentor after being introduced during failed acquisition talks. Today, California Burrito has allocated a fun budget of ₹300 per head per month for store managers to spend as they please, to boost morale, and the company also offers incentives for performance. Every staff member of California Burrito is on their payroll.
On the sourcing front, the key ingredient for good Mexican guacamole is a type of avocado not locally produced in India. They even pitched to the banana growers association in Dindigul to grow it, then started growing them in Coorg by helping farmers there get access to seeds from abroad, demonstrating the importance of local adaptation.
The COVID-19 pandemic forced California Burrito to enhance its delivery capabilities, which now account for 55–57% of their business. While delivery aggregators are useful, the data they provide is even more valuable for strategic decision-making.
Bert initially had two co-founders, friends from the USA, who left at various stages, leaving him as the sole promoter a few years ago. He emphasized that being a single promoter turned out to be advantageous, as it allows for faster decision-making and the ability to hire professionals to manage different departments without the complexity of responsibility allocation between co-founders. His experience shows that a single promoter shouldn’t be a deterrent to running a successful business.
Running a business in India for ten years has taught Bert invaluable lessons. He noted the brilliance of India’s blue-collar workers, who often lack formal education but possess immense potential. This contrasts with his observations of blue-collar workers in the USA.
Bert feels physical stores pay off and are more useful than dark stores. Physical stores develop market awareness, which saves money on marketing. Additionally, there is something valuable about staff seeing customers and interacting in physical stores, as it improves their morale and overall service and product quality.
Bert Muller’s journey with California Burrito is a compelling narrative of resilience, adaptability, and innovation. His experiences offer valuable lessons for entrepreneurs entering new markets and industries. As he rightly pointed out, the lessons learned in India are unique to the country, and expanding to the USA would require learning new lessons. His story is a reminder of the potential that lies in embracing new challenges and the importance of learning and adapting along the way.
Originally published at https://venkatarangan.com on October 25, 2024.
